FLORIDA CONSTRUCTION HOLDBACK Clause Samples
The Florida Construction Holdback clause establishes a requirement for withholding a portion of payment on construction projects in Florida until certain conditions are met, typically the satisfactory completion of work or the expiration of a lien period. In practice, this means that a specified percentage of the contract price is retained by the owner or general contractor and only released once all subcontractors and suppliers have been paid and no liens have been filed. This clause serves to protect property owners and general contractors from potential claims or liens by ensuring that funds are available to address unpaid obligations, thereby reducing the risk of legal disputes and ensuring project completion.
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FLORIDA CONSTRUCTION HOLDBACK. At the time of closing of the Florida Loan, the sum of $950,000.00 shall be withheld ("Construction Holdback") by the Lender. The Borrower shall complete the renovations and improvements to the Florida Project described in the Construction Contract. No interest shall be payable on the Construction Holdback until such time as and only to the extent actually advanced to Borrower. Upon the completion of the renovations and improvements to the Florida Project, the Lender will advance the Construction Holdback to the Borrower provided that the following items have been provided to the Lender: (i) a certificate of occupancy for the Florida Improvements from the appropriate governmental agency; (ii) a certificate of completion prepared and submitted by the Borrower and Borrowers' Project Architect, and approved by the Lender's construction inspector, which certificate shall contain only such qualifications as are acceptable to Lender, in Lender's sole discretion, and indicating that the construction of the Florida Improvements has been completed substantially in accordance with the approved Plans and Specifications, all construction has been completed in a good and workmanlike manner, all applicable zoning, building, or other governmental codes or regulations have been complied with, there are no known structural deficiencies, and all mechanical equipment, including, without limitation, plumbing, air conditioning and heating, electrical, and kitchen equipment, if any, is in good working order; (iii) an affidavit of completion executed by the Borrower's General Contractor satisfactory to Lender, Lender's counsel and the Title Company in their sole discretion; (iv) lien waivers from any and all contractors, in form and substance satisfactory to Lender, Lender's counsel and the Title Company in their sole discretion; and (v) any and all other additional documents as Lender may reasonably require. Lender's obligation to advance any portion of the Construction Holdback is contingent upon (i) no Event of Default then existing under any of the Loan Documents and (ii) the amount to then be advanced under the Construction Holdback when coupled with all prior Advances under the Florida Loan will not exceed 75.0% of the then appraised value of the Florida Project as determined by an updated appraisal acceptable to Lender.